The head of Gunvor Group, the world's fourth-largest independent oil trader, has issued a warning that the oil market is bracing for heightened instability. He cited escalating tensions in the Middle East combined with a seasonal slowdown in demand, suggesting that crude oil prices could experience more severe and less predictable swings.
Gary Pedersen, who assumed leadership of the trader following a management buyout last December, indicated that market volatility is likely to intensify between April and June. This period typically sees a dip in crude demand as it falls between the winter heating season and the peak summer driving season.
He stated, "This is a more challenging phase with weaker demand, and we must remain cautious. Frankly, market movements could be extremely volatile." He suggested that price fluctuations may be increasingly driven by news headlines rather than fundamental supply and demand dynamics.
The International Energy Agency (IEA) has forecast a significant reduction in global daily oil demand for the second quarter of this year, predicting a drop of 1.5 million barrels per day, which would be the largest decline since the COVID-19 pandemic. In contrast, the Organization of the Petroleum Exporting Countries (OPEC) anticipates a more moderate decrease of 500,000 barrels per day.
Gunvor Group recently reported robust first-quarter earnings, achieving a gross profit exceeding $1.6 billion, a figure that matches its total profit for the entire year of 2025.
Mr. Pedersen revealed that the company has drawn lessons from recent crises and has prepared contingency plans for potential conflict involving Iran. In past crises, the company found itself exposed by rising oil prices, leading to forced liquidation of trading positions and revealing weaknesses in its risk management.
"We have fully leveraged the extensive experience accumulated by the team here since 2022," he said, referring to the period following Russia's full-scale invasion of Ukraine, which caused natural gas prices to surge.
Prior to the outbreak of the current Middle East tensions, Gunvor had reassessed all its positions and risk exposures. The company continued trading throughout the conflict, including making significant purchases of crude oil released from the U.S. Strategic Petroleum Reserve. "We faced no liquidity constraints whatsoever, were able to trade normally, maintain liquidity, and focus on various arbitrage opportunities," Pedersen explained.
A core element of this strategy is a focus on physical crude oil trading rather than oil derivatives. Pedersen mentioned that he instructs traders to minimize what he terms "stress risk"—the danger of being caught off-guard by extreme and unpredictable price movements. "Stress risk can bring business to a halt, so we ensure we are continuously measuring it on a daily basis," he said.
Despite frequent and sharp declines in crude futures—which Pedersen partly attributed to political statements from U.S. President Donald Trump, which he called "textbook"—he noted that the physical crude market remains tight. This is because buyers are eager to secure alternatives to supplies from the Gulf region that are potentially at risk.
Gunvor is emerging from a period of internal turmoil. Previously, the company faced strained relations with the U.S. government, which once labeled it a "Kremlin puppet" and blocked its attempt to acquire overseas assets of Russia's Lukoil. This crisis ultimately led to the departure of its founder, Torbjörn Törnqvist, and the subsequent management buyout.
The United States is now a core market for the company. Gunvor holds over $4 billion in assets in the U.S., which accounts for approximately one-third of its total trading volume. "We are focused on expanding our footprint in the United States; we remain very bullish on the U.S. natural gas and crude oil markets," Pedersen stated.
He also expressed interest in acquiring refining assets, believing that years of capacity shutdowns in Western markets have created investment opportunities. "With demand growth, the outlook for the refining business is very optimistic," he added.
Leveraging his background from working at the hedge fund Millennium, Pedersen is steering Gunvor towards becoming a more data-driven trading organization. "My background is more analytical," he said. "I want to quantify metrics as much as possible."
Following the management buyout, Pedersen and his partners are obligated to repay billions of dollars to Mr. Törnqvist over the next decade. Törnqvist held an 86% stake in the company, which was valued at $6 billion at the time of his exit.
Company executives insist that this financial arrangement gives the former founder absolutely no influence over the business. Gia Mai, Gunvor's Chief Operating Officer, stated, "There are no clauses in any of the agreements that would allow him to intervene in company operations."
Jeff Webster, the Chief Financial Officer, added, "Clearly, if we could have paid the full amount upfront, we would have. But the structure he designed allows for a complete exit from the business on his part, while enabling us to repay the debt in a manner most beneficial for the company's development."
Pedersen emphasized that his top priority is to ensure Gunvor delivers stable performance across various market cycles. "We aim to be profitable in both good markets and bad," he concluded.
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